British intelligence predicts an increase in the Russian economy’s dependence on the war.

British intelligence believes that Russia will likely spend more on defense in 2025 than anticipated in this year’s budget due to inflationary pressures. This is, in part, because inflation will almost certainly exceed the Russian Central Bank’s target of 4%, despite efforts to control it by raising interest rates. It is noted that most corporate defaults will occur in civilian sectors, further increasing dependence on the military-industrial complex as a driver of economic activity.

According to The Telegraph, despite US President Trump’s efforts to end the war, the Russian economy is directly tied to the continuation of hostilities; thus, Putin is not preparing for peace but simply strengthening his military machine. Currently, the military economy accounts for 8-10% of Russia’s GDP, which is significant for a country engaged in a war beyond its own borders.

Manufacturing, which includes the military-industrial complex, was the only sector to show growth last year, at 7.6%. Eliminating the state’s military spending engine would plunge Russia into an economic stagnation comparable to that of the 1980s.